FX PilotInflation is not strong enough to keep the Riksbank on track

The weaker inflation numbers, especially CPIF excluding energy, lead us to believe that the Riksbank will decide to postpone its next rate hike from September to December at next week's Executive Board meeting. The krona is much weaker than the Riksbank's latest forecast, currently trading around 6.5 percent below forecast, leading us to believe in a minor revision to the rate path. With the risk of echoing a message from the past, we still believe the EURSEK is too high. Now that the UK and the EU have managed to agree on a transition period for the Brexit process, it is time to move on to negotiating the future relationship. Domestic UK politics do not make this second phase look any easier.